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The Federal Government has announced it will seek to legislate to close a loophole that could be used by 'unscrupulous' employers to short change employees who choose to make salary sacrifice contributions into their superannuation accounts.
At the moment a loophole exists where employers can legally withhold their workers' salary sacrifice contributions for up to four months, before transferring the money into their superannuation account.
Some employers have reportedly been using the loophole to reduce their compulsory 9.5% super contributions by basing them on the salary less voluntary sacrifices. It was revealed in 2016 that up to about 360,000 employees are impacted by the salary sacrifice loophole.
The proposal is a key recommendation of the Superannuation Guarantee Cross Agency Working Group.
Kelly O’Dwyer, the Minister for Revenue and Financial Services, said the Turnbull Government will introduce the Bill into Parliament this year that will ensure an individual’s salary sacrifice contributions do not reduce their employer’s superannuation guarantee obligation.
“If Australians are to continue to have confidence in the integrity of the superannuation system, we must ensure employers are paying workers their full entitlements, whether they are wages or superannuation,” said O’Dwyer.
O’Dwyer also released the Superannuation Guarantee Cross Agency Working Group, Superannuation Guarantee Non compliance report, which made a number of recommendations to improve employer’s compliance with their superannuation guarantee obligations.
The Government established the Working Group – comprising senior representatives from the ATO, the Treasury, the Department of Employment, ASIC and APRA – in December 2016.
The Working Group’s report provides a set of targeted recommendations to improve superannuation guarantee compliance.
The Turnbull Government is currently considering the remaining recommendations made by the Working Group report to ensure that any measures progressed will improve compliance without unduly burdening employers.
At the moment a loophole exists where employers can legally withhold their workers' salary sacrifice contributions for up to four months, before transferring the money into their superannuation account.
Some employers have reportedly been using the loophole to reduce their compulsory 9.5% super contributions by basing them on the salary less voluntary sacrifices. It was revealed in 2016 that up to about 360,000 employees are impacted by the salary sacrifice loophole.
The proposal is a key recommendation of the Superannuation Guarantee Cross Agency Working Group.
Kelly O’Dwyer, the Minister for Revenue and Financial Services, said the Turnbull Government will introduce the Bill into Parliament this year that will ensure an individual’s salary sacrifice contributions do not reduce their employer’s superannuation guarantee obligation.
“If Australians are to continue to have confidence in the integrity of the superannuation system, we must ensure employers are paying workers their full entitlements, whether they are wages or superannuation,” said O’Dwyer.
O’Dwyer also released the Superannuation Guarantee Cross Agency Working Group, Superannuation Guarantee Non compliance report, which made a number of recommendations to improve employer’s compliance with their superannuation guarantee obligations.
The Government established the Working Group – comprising senior representatives from the ATO, the Treasury, the Department of Employment, ASIC and APRA – in December 2016.
The Working Group’s report provides a set of targeted recommendations to improve superannuation guarantee compliance.
The Turnbull Government is currently considering the remaining recommendations made by the Working Group report to ensure that any measures progressed will improve compliance without unduly burdening employers.